WASTE 2019 MARKET INTELLIGENCE REPORT - GREENCAPE
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GreenCape GreenCape is a non-profit organisation that works at the interface of business, government and academia to identify and remove barriers to economically viable green economy infrastructure solutions. Working in developing countries, GreenCape catalyses the replication and large-scale uptake of these solutions to enable each country and its citizens to prosper. Acknowledgements We thank Sam Smout and Kirsten Barnes for the time and effort that went into compiling this market intelligence report. For their inputs, we thank Annabe Pretorius, Chantal Rudman, Hein Fourie, Mike Pienaar, Noko Sekgobela, Thomas Orr and Marc Lewis, Nokwazi Moyo, the City of Cape Town and the Stellenbosch local municipality, as well as the various associations, ORASA, PETCO, POLYCO, SAEWA, PASA, and PRASA. Lastly, we wish to thank the crushing industry for supplying data, and the RecMat committee for their technical expertise. Disclaimer While every attempt has been made to ensure that the information published in this report is accurate, no responsibility is accepted for any loss or damage to any person or entity relying on any of the information contained in this report. Copyright © GreenCape 2019 This document may be downloaded at no charge from www.greencape.co.za. All rights reserved. Subscribe to receive e-mail alerts or GreenCape news, events, and publications by registering as a member on our website: www.greencape.co.za 18 Roeland Street, Cape Town, 8001, South Africa Editorial and review: Lauren Basson, Salomé Bronkhorst, Quinton Williams and Nicholas Fordyce Images: Bruce Sutherland, Pxhere and GreenCape Layout and design: Tamlin Lockhart Art Direction ii Waste: Market Intelligence Report 2019
This report is dedicated to South Africa’s former Minister of Environmental Affairs, Edna Molewa, who passed away recently. Ms Molewa made a significant contribution to a democratic and sustainable South Africa. A progressive and passionate minister, her vision, especially around waste management in the country, will remain an inspiration to all. Waste: Market Intelligence Report 2019 iii
Contents Executive summary x What’s new? 1 1. Introduction and purpose 2 2. Sector overview 4 2.1. Sector structure 4 2.1.1. Public sector 5 2.1.2. Private sector 6 2.1.3. Households 6 2.1.4. Recycling industry associations 7 2.1.5. Informal waste collectors 7 2.2. Size of the South African waste sector 7 2.2.1. Household separation levels 9 2.3. Size of the Western Cape waste sector 10 2.4. General drivers for waste beneficiation 13 2.4.1. Increasing cost of landfilling 13 2.4.2. Loss of landfill airspace 14 2.4.3. Perceived job creation in waste 15 2.5. General risks and barriers 15 2.6. Highlights from 2017/2018 16 3. Legislation and regulations 18 3.1. The legislative framework for waste management 18 3.2. New regulatory updates 19 3.3. Draft regulations 20 3.4. Anticipated regulations / guidelines 20 4. Opportunities 22 4.1. Organics 22 4.1.1. Market overview 22 4.1.2. Opportunities 26 4.1.3. Drivers 27 4.1.4. Risks and barriers 27 4.1.5. Recent developments 31 4.2. Electronic waste 32 4.2.1. Market overview 32 4.2.2. Opportunities 35 4.2.3. Drivers 37 4.2.4. Risks and barriers 37 4.3. Plastics 38 4.3.1. Market overview 38 4.3.2. Opportunities 44 4.3.3. Drivers 44 4.3.4. Risks and barriers 44 4.3.5. Recent developments 45 4.4. Builders’ rubble 45 4.4.1. Market overview and opportunities 45 4.4.2. Drivers 47 4.4.3. Risks and barriers 47 4.4.4. Recent developments 48 iv Waste: Market Intelligence Report 2019
5. Funding and incentives 52 5.1. General database web page 52 5.1.1 Green finance database 52 5.1.2 Government funding and incentive database 52 5.1.3 Finfind database 52 5.1.4 AlliedCrowds database 52 6. The Western Cape: Africa’s green economy hub 54 7. GreenCape’s support to businesses and investors 58 8. Annex A: Western Cape waste tonnages 60 Annex B: CoCT waste characterisation study 61 9. References 62 Waste: Market Intelligence Report 2019 v
List of figures Figure 1: Waste collection and treatment responsibilities in South Africa 5 Figure 2: Classification of total waste generated in South Africa in 2011 8 Figure 3: Household separation by province (2015) 10 Figure 4: Household separation by metro (2015) 10 Figure 5: Western Cape waste characterisation in 2015 11 Figure 6: Waste characterisation for the CoCT 12 Figure 7: Landfill gate fees for general waste for South Africa’s eight metros in 2017/2018 13 Figure 8: Landfill gate fees (excl. VAT) for the CoCT (2013/14 – 2020/21) 14 Figure 9: Estimated landfill lifespan for each local municipality in the Western Cape 15 Figure 10: Organic waste relative to total waste generated in the Western Cape in 2015 23 Figure 11: Current and planned (by 2022) MSW, commercial, and industrial organic waste solution in CoCT 26 Figure 12: Typical e-waste value chain 34 Figure 13: Comparison of the use of virgin plastic versus recyclate plastic in 2017 38 Figure 14: Types and tonnages of plastic recycled and exported in South Africa in 2017 39 Figure 15: Generic plastics value chain 39 Figure 16: Source of feedstock by value chain in 2017 40 Figure 17: Source of feedstock by stakeholders in 2017 40 Figure 18: End market of plastic recyclate in 2017 41 Figure 19: Provincial plastic distribution based on pop and GVA distribution for 2017 43 Figure 20: Number of plastic recyclers per province and total recyclate produced in 2017 44 Figure 21: Gross Fixed Capital Formation and forecast of construction sector growth 47 vi Waste: Market Intelligence Report 2019
List of tables Table 1: Recyclables processed and available in 2017 as reported by associations 9 Table 2: Total waste tonnages generated per district municipality / metro in 2015 10 Table 3: MSW generated per district municipality/metro in 2015, 2018 and 2021 12 Table 4: Organic waste generated in the Western Cape in 2015 24 Table 5: MSW organic waste generated in the Western Cape between 2015 and 2021 24 Table 6: Commercial and industrial organic waste generated in the Western Cape between 2015 and 2021 25 Table 7: Viable project models in South Africa as of March 2018 29 Table 8: Reported tonnages of e-waste: South Africa and the Western Cape 33 Table 9: Distribution of e-waste generation across the Western Cape for 2018 33 Table 10: SADC e-waste generated in 2016 36 Table 11: Plastics from MSW: Western Cape and Cape Town (2015 – 2021) 42 Waste: Market Intelligence Report 2019 vii
List of abbreviations and acronyms AD Anaerobic digestion AWT Alternative waste treatment CCA Customs-controlled area C&DW Construction and demolition waste C&I Commercial and industrial CoCT City of Cape Town DEA Department of Environmental Affairs DEA&DP Western Cape Department of Environmental Affairs and Development Planning DEDAT Western Cape Department of Economic Development and Tourism DoE Department of Energy DST Department of Science and Technology dti Department of Trade and Industry EAP Environmental Assessment Practitioner EAPASA Environmental Assessment Practitioners Association of South Africa EIA Environmental impact assessment EPR Extended producer responsibility ETI Employment tax incentive eWASA e-Waste Association of South Africa GDP Gross domestic product GFCF Gross fixed capital formation GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GN Government Notice GRI Gestamp Renewable Industries GVA Gross value added GW Gigawatt GWIS Gauteng waste information system HCRW Health care risk waste ICT Information and Communications Technology IDC Industrial Development Corporation IT Information technology ITAC International Trade Administration Commission of South Africa IPP Independent power producer ISO International Organization for Standardization IIWTMP Integrated Industry Waste Tyre Management Plan IndWMP Industry Waste Management Plan IWMP Integrated Waste Management Plan KfW Kreditanstalt für Wiederaufbau (Reconstruction Credit Institute) KfW Entwicklungsbank KfW Development Bank kWh Kilowatt hour(s) LDPE Low-density polyethylene MFMA Municipal Finance Management Act, No. 56 of 2003 MIG Municipal Infrastructure Grant MIR Market intelligence report MRF Material recovery facility MSA Municipal Systems Act, No. 32 of 2000 MSW Municipal solid waste MW Megawatt(s) NDP National Development Plan NEMA National Environmental Management Act, No. 107 of 1998 NEMAQA National Environmental Management Air Quality Act, No. 39 of 2004 viii Waste: Market Intelligence Report 2019
NEMWA National Environmental Management: Waste Act, No. 59 of 2008 NPSWM National Pricing Strategy for Waste Management NWIB National Waste Information Baseline NWMS National Waste Management Strategy ORASA Organic Recyclers Association of South Africa PCB Printed Circuit Boards PE-HD High-density polyethylene PE-LD Low-density polyethylene PE-LLD Linear low-density polyethylene PET Polyethylene terephthalate PETCO PET Recycling Company of South Africa Polyco Polyolefin Recycling Company PP Polypropylene PPP Public-private partnership PRASA Paper Recycling Association of South Africa PRO Producer responsibility organisation PS Polystyrene PS-E Polystyrene expanded PSPC Polystyrene Packaging Council PVC Polyvinyl chloride R&D Research and development RDF Refuse delivered fuels RDI Waste Research, Development and Innovation Roadmap REDISA Recycling and Economic Development Initiative of South Africa REEEP Renewable Energy and Energy Efficiency Partnership REIPPPP Renewable Energy Independent Power Producer Procurement Programme rPET Recycled polyethylene terephthalate SABIA Southern African Biogas Industry Association SAEWA South African e-Waste Alliance SALGA South African Local Government Association SANEDI South African National Energy Development Institute SAVA Southern African Vinyls Association SAWIS South African Waste Information System SEZ Special economic zone SMEs Small and medium-sized enterprises SMMEs Small, medium and micro-sized enterprises SoWR State of Waste Report StEP Solving the e-waste problem SuRF Sustainable Roads Forum TA Transactional Advisor TGRC The Glass Recycling Company UNIDO United Nations Industrial Development Organization VAT Value-added tax WCG Western Cape Government Waste: Market Intelligence Report 2019 ix
Executive summary The South African waste management landscape is set to experience a raft of legislative and regulatory changes that will advance the country toward a more resource-efficient economy. This will create opportunities for business and investors in the waste sector who focus on plastics, organics, e-waste, and construction and demolition waste. Disposal continues to dominate the South Although private stakeholders also own landfills, Africa waste landscape. According to the municipal landfills are open for private sector outdated 2011 national waste information disposal. It is more convenient for investors and baseline (NWIB), South Africa generated ~108 businesses to partner with the private sector million tonnes of waste in 2011. The 2011 estimate waste generators and waste handlers. indicates that 10% of the total waste stream is being recycled with the remaining 90% being According to DEA (2017), the waste economy landfilled. A 2017 update should be available by contributed ~R24.3 billion to the South African early to mid-2019 when the national Department GDP in 2016. It provided 36 000 formal jobs and of Environmental Affairs (DEA) publishes its first supported ~80 000 informal jobs/livelihoods. A State of Waste Report (SoWR). We expect that the further R11.5 billion per year could be unlocked by report will show healthy growth in waste diversion 2023 by diverting up to 20 million tonnes of waste. in the country. The anticipated spin-offs could include 45 000 additional formal jobs and 82 000 indirect jobs, The Western Cape province generates ~7.7 million as well create of 4 300 SMMEs. tonnes of waste annually, of which 2.4 million tonnes (31%) consist of municipal solid waste, Opportunities within the organic, e-waste, 2.4 million tonnes (31%) of agricultural and plastics and builders’ rubble sectors have the forestry waste/residues, 1.7 million tonnes (22%) potential to unlock ~R1.2 billion in value. However, of construction and demolition waste, and 0.9 to unlock this value, stakeholders must be million tonnes (11%) of commercial and industrial involved and technologies implemented. A variety waste. The remaining 0.4 (5%) consist of other of opportunities exist: waste streams. ■ Organics: In 20181 in the Western Cape there Of the total for the province, the City of Cape were ~520 650 tonnes of MSW organic and ~318 Town generates a substantial portion (48%) 626 tonnes of commercial and industrial of the waste, which includes 1.7 million tonnes organic waste available for recycling. This of municipal solid waste, 1 million tonnes of total market is valued at an estimated R83 construction and demolition waste, 0.6 million million to R158 million per year, depending on tonnes of commercial and industrial waste, 0.07 the end product 2. At the municipal level, the tonnes of agricultural and forestry waste/residues, greatest value lies in the CoCT with a market and 0.3 million tonnes of other waste streams. value for organics, depending on product produced, of R59 to R111 million per year. Household waste is managed by municipalities and/or by their appointed service providers. Commercial and industrial waste is typically managed by the private sector in larger municipalities, and to some extent the municipalities themselves. 1 Excluding agriculture, abattoir and forestry waste 2 Based on a value of between R100 (R20 per 20kg of compost sold in store which is generated from 200kg of organic waste) and R188, according to Waste Road Map (DST 2014) value for organics per tonne of organic waste. x Waste: Market Intelligence Report 2019
■ E-waste: If a conservative range of between Key drivers of these opportunities include: R1 309 and R1 636 per tonne of scrap e-waste (excluding higher value materials) is applied, ■ Legislation and regulation: New and changing then the low value of e-waste in the Western national and provincial legislation and Cape is between R54.5 and R108.4 million per regulations are set to unlock a number of year, with the CoCT holding the largest value key waste streams, notably organics. These of R34.9 to R75.4 million. changes will also help to simplify rules and procedures for alternative waste treatment ■ Plastics: If a value of between R1 950 and technologies and activities. R2 600 per tonne of plastics is used, the value for the Western Cape’s MSW plastics is ■ Industry waste management plans: The between R462.2 and R616.2 million per year, paper and packaging, e-waste and lighting with CoCT MSW plastics valued between industries will be legally required to implement R321.5 and R428.7 million in 2018. mechanisms to ensure extended producer responsibility. This will ensure access to ■ Builder’s rubble: The supply of and demand for feedstock, and support demand for builder’s rubble as an alternative to virgin recovered materials. material are growing. National government and local municipalities are focusing ■ Government initiatives: The initiatives increasingly on diverting rubble from landfill. identified by the national government’s The private sector is increasingly applying fast results delivery programme, Operation builder’s rubble as a secondary construction Phakisa, should increase access to feedstock material, in the context of rising virgin material and stimulate growth in market demand. costs. The current value of builder’s rubble available to the market in South Africa is ■ Cost of disposal: Dwindling landfill space conservatively estimated at R132 to R309 and rising management costs are pushing million, depending in its application. up the price of landfilling in the Western Cape and the CoCT in particular. This increases demand from waste generators for alternative waste treatment solutions, which in turn improves the financial viability of solutions. Waste: Market Intelligence Report 2019 xi
What’s new? For investors and business owners who have read GreenCape’s 2018 Waste MIR, the following are new developments discussed in this report: The 2018 report focused on the waste opportunities opened up by industry changes at the provincial and national level. This year’s report provides updates on: ■ market trends in organics, plastics, e-waste, and builders’ rubble; ■ industry developments, in particular on industry waste management plans, the increase in landfill gate fees, and the latest State of Waste Report data (since the 2011 NWIB); and ■ new opportunities in the markets for organics, plastics, e-waste and builder’s rubble. 1 Waste: Market Intelligence Report 2019
1 Introduction and purpose This report provides insights into the South African and the Western Cape waste sector. It also outlines market opportunities for investors who are active or interested in providing alternative waste treatment and beneficiation solutions. This MIR has been compiled by GreenCape’s Waste In Section 5, we focus on finance and incentives. Sector Desk. It highlights insights and opportunities gathered from our engagements with stakeholders The case for the Western Cape as a greentech in, and research on, the waste sector. hub for Africa is covered in Section 6. This is followed by Section 7, which outlines Section 2 below provides an overview of the GreenCape’s work and the opportunities for waste sector in South Africa, with a focus on the investors across the South African and Western Western Cape. This is followed by an overview in Cape green economy. Section 3 of key policies and regulations that guide and affect the sector. Section 4 provides For queries or to access any of our support an overview of market opportunities, drivers, services, contact GreenCape’s Waste Sector barriers, risks and recent developments in Desk at +27 21 811 0250 or email organics, e-waste, plastics and builder’s rubble. waste@greencape.co.za. Waste: Market Intelligence Report 2019 2
© Bruce Sutherland, City of Cape Town 3 Waste: Market Intelligence Report 2019
2 This section provides investors, businesses and new entrants with an overview of South Africa’s waste sector, with a focus on the Western Cape. The section covers the following: The main drivers of growth in waste beneficiation include: ■ the structure of the waste sector; ■ key stakeholders, and their roles and ■ increased awareness of the impact of waste responsibilities; on the economy, environment, and society; ■ provincial and national sector sizes; ■ extensive support from producer responsible ■ drivers, risks and barriers; and organisations and industry associations; ■ developments since the publishing of the ■ regulatory reforms (national and provincial); 2018 MIR. ■ increased pressure on municipal landfill airspace; GreenCape has been producing an annual Waste ■ a growing understanding of the value of Economy MIR3 since 2014. Over the last five years, waste; and the momentum in the waste sector has been ■ recognition by government that the building, albeit slowly, towards a waste economy waste economy creates jobs and attract increasingly characterised by waste investments. beneficiation. Private sector investments have grown in number and scale, there have been The latter has resulted in a number of positive positive regulatory reforms, and the scope and developments: scale of industry organisations have expanded. ■ the proposal of extended producer The South African waste economy continues to responsibility through the request for experience positive growth, and there is growing development of industry waste management interest in the uptake of alternative waste plans (IndWMP) for specific sectors; treatment solutions and associated value chains. ■ various regulations to encourage waste This has resulted in continued and increasing diversion from landfill; diversion of waste from landfill, both within the ■ data gathering and updating initiatives; Western Cape and South Africa. ■ a Phakisa4 for the chemical and waste economy; and ■ infrastructure investments by local governments; South Africa generated ~108 million tonnes of waste in 2011. 2.1. Sector structure South Africa categorises wastes into hazardous Of this, ~10% was recycled. and general waste, which are regulated by the National Waste Regulations (R. 625 of August 2012). South Africa generated ~108 million tonnes of South Africa’s waste sector comprises the public waste in 2011. Of this, ~10% was recycled. and private sectors, and households. Recycling 3 Previous MIRs can be accessed at www.green-cape.co.za/market-intelligence 4 Phakisa means “hurry up” in Sesotho. Operation Phakisa is an initiative by national government to fast track the implementation of solutions on critical development issues under the National Development Plan. Waste: Market Intelligence Report 2019 4
industry associations and Producer Responsible sectors. Figure 1 shows the relationship between Organisations (PRO) support their respective sectors, and their legal roles and responsibilities. Collection Local municipalities Private sector Local municipalities are constitutionally Waste management companies can be Household mandated to ensure that household contracted by local municipalities waste is collected. They can either (through a procurement process) to provide the collection service themselves, collect household waste, or to manage Generation or appoint private waste contractors. drop-off facilities open to households. Local municipalities are not obligated to Commercial and industrial waste Commercial / service commercial/industrial waste generators are responsible for the Industrial generators. However, the latter may ask management of their own waste, local municipalities to collect waste, including safe disposal. This is usually thereby incurring a service fee. outsourced to private waste management. Municipalities are mandated to ensure The private sector can either have Treatment / Disposal the availability of disposal facilities its own waste treatment and/or disposal (landfills). They can support alternative facilities; or it can be contracted by waste treatment by means of providing local municipalities to manage material recovery and aggregation municipal recovery, aggregation or infrastructure. Such facilities can be disposal facilities. managed by the municipality itself, or contracted to the private sector through a procurement process. Figure 1: Waste collection and treatment responsibilities in South Africa Source: GreenCape 2.1.1. Public sector monitoring the implementation of plans. It is All spheres of government are legally responsible expected to include monitoring and managing for the management of waste in South Africa, and the disbursement of funds collected through in general for upholding the requirements of the producer-paid levies. Constitution and the National Environmental Management Waste Act (NEMWA), Act 59 of 2008, Provincial including related regulations. Provincial environmental authorities are generally responsible for regulating waste National management. Their functions include The national Department of Environmental promulgating provincial legislation, providing Affairs (DEA) is the overarching authority for municipal support, and monitoring municipal and waste management in South Africa, and is the private sector activities. The Department of licensing authority for hazardous waste Environmental Affairs and Development Planning treatment activities. Its Waste Management (DEA&DP) is the Western Cape’s provincial Bureau has been established to manage and authority regulating waste management. implement the Industry Waste Management Plans (IndWMPs) (see Section 2.5). The role of the Waste generators and handlers, triggering bureau includes supporting and advising certain thresholds stipulated in the National industry on the development of the plans, and Waste Information Regulations (R. 625 of 2012), 5 Waste: Market Intelligence Report 2019
must register with and report waste figures to before municipalities are able to partner with the either the national DEA, through the South private sector African Waste Information System (SAWIS)5; or a provincial waste information system. In the However, the NEMWA and the 2011 National Waste Western Cape, this is the Integrated Pollutant Management Strategy (NWMS) require local and Waste Information System (IPWIS) managed municipalities to implement alternative waste by DEA&DP, whilst in Gauteng their waste treatment in order to divert waste from landfill information system (GWIS) is managed by the and to minimise environmental degradation. In Department of Agriculture and Rural Development. some cases, municipalities provide infrastructure for aggregation (drop-offs) and the separation Investors and businesses developing or (material recovery facilities), rather than expanding waste initiatives that require providing the actual recycling infrastructure. a waste management licence (see Section 3.1) These facilities are either operated by the must apply for the licence through a provincial municipality or outsourced to the private sector. environmental authority if general waste is handled. If they handle hazardous waste, then 2.1.2. Private sector applications must go through the national DEA, The commercial and industrial sector is with the provincial environmental authorities responsible for the management of their own as a commenting authority. Engagement with wastes. They are bound by various regulatory provincial authorities should be undertaken requirements, whether they are waste generators, before initiating the waste licence applications and/or waste handlers: to ensure clarity in the process, or to confirm whether it is needed. Waste generators Waste generators are responsible for the Local municipalities management of their own waste. This can either Municipalities are constitutionally mandated be outsourced to private service providers, or to to provide waste collection, removal, storage, the local municipality on request. Both options and disposal of waste generated by households will incur a service fee. Private service providers within their boundaries. Collection can be done are incentivised to explore alternative waste by local municipalities or be outsourced to the treatment as the cost of landfilling increases. private sector. Local municipalities are not Also, municipalities do not, in general, involve required to provide the private sector with themselves with hazardous waste collection waste collection services. from the private sector. Municipalities are also expected to provide Waste handlers waste collection and disposal infrastructure. Waste management service providers are Although alternative waste treatment is not responsible for the provision of responsible waste explicitly required by the Municipal Systems Act management services to their clients, or as (MSA) (32 of 2000), it is considered in the Act to contracted to do so by local municipalities. be a municipal support activity (National Treasury 2008). Investors seeking access to waste streams find it more convenient to work with the private sector Section 76 to Section 78 of the Municipal Systems and their service providers than with Act (32 of 2000) outline the key steps needed municipalities, as the former have fewer procurement requirements with which to comply. 2.1.3. Households Section 76 to Section 78 of the Households are generally serviced by their local Municipal Systems Act (32 of 2000) municipalities, or by the private companies outline the key steps needed before contracted by municipalities to collect waste. municipalities are able to partner Some municipalities require households to separate recyclables from non-recyclables, and with the private sector to ensure that the recyclables are disposed of responsibly. This can be done by contracting the 5 SAWIS is South Africa’s national waste reporting system established in terms of section 60 of the NEMWA Waste: Market Intelligence Report 2019 6
local municipality (unless the municipality has a Investors or businesses who intend to enter the recycling collection service), contracting an paper and packaging, e-waste or the lighting accredited waste service provider, or delivering recycling sectors should engage with their the recyclables at a licensed facility. Voluntarily relevant PROs (once designated), or in the interim contracting in the private sector is becoming with the industry associations. more common. 2.1.5. Informal waste collectors 2.1.4. Recycling industry associations South Africa’s informal waste sector plays a South Africa’s recycling sector is driven by industry, principal role in waste diversion (in particular and supported by industry-funded associations. of post-consumer recyclables) from landfill. Each association promotes the recovery and However, in most cities and towns in South Africa, recycling of materials at different points of the informal waste pickers are marginalised and value chain. However, there are no regulated operate at the fringe of formal management distinctions between the roles and responsibilities systems. The full extent of the importance of the of the different industry associations. informal waste sector is not fully understood, due to the nature of the informality; however, this is South Africa has a number of industry associations currently being actively investigated by the that focus on mainstream recyclables, e-waste, national Department of Science and Technology. and organics. Each of the associations provide There are over 50 000 informal landfill and varying levels of support to their members along kerbside waste pickers in the country. It is the respective value chains. See Table 2 for a list of estimated that the informal sector supply 80% active industry associations. to 90% of packaging waste to recyclers (Plastics|SA, 2015). In the past, membership and financial contributions to associations were voluntary. 2.2. Size of the South African This is expected to change with the waste sector implementation of mandatory extended producer At the time of publication, the national DEA was responsibility through adherence to IndWMPs. finalising its first State of Waste Report (SoWR) Producers along the paper and packaging, for South Africa. This SoWR should include an electrical and electronics, and lighting value update to the 2011 national waste information chains will be legally required to adhere to the baseline (NWIB). The SoWR will be the most requirements of IndWMPs (see Section 3.2), current source of information for decision makers which will be managed by designated PROs. developing plans and policies concerning waste. There is a range of sources and extrapolated These PROs will more than likely replace the figures for the size of the SA waste sector, on role of some associations and complement which investors can draw until such time as the others, but the mission will stay the same – to SoWR is released. ensure that waste materials are diverted from landfill (supply) and to ensure market DEA National Waste Information development (demand). Baseline and extrapolated figures for 2016 According to the 2011 NWIB, South Africa generated approximately 59 million tonnes of Investors or businesses who intend general waste, 48 million tonnes of unclassified to enter the paper and packaging, waste, and 1 million tonnes of hazardous waste e-waste or the lighting recycling – a total of 108 million tonnes in 2011 (DEA 2012). sectors should engage with their Only 10% of all waste was recycled, with 90% relevant PROs (once designated), landfilled6. We expect that the 2019 SoWR will or in the interim with the industry show increased diversion and an exponential increase in recycling rates. Figure 2 shows a associations. breakdown of waste types as a percentage of total waste. 6 This does not take into account leakage, e.g. materials that enter oceans or are exported and are effectively ‘lost’ from the accounting system. 7 Waste: Market Intelligence Report 2019
55+44+1L 108M TONNES 55% 44% 1% Figure 2: Classification of total waste generated in South Africa in 2011 The DEA presented extrapolated waste figures for 2016 as part of the Operation Phakisa for chemicals and waste economy. The estimates indicated that waste generation had increased GENERAL 59 353 901 T UNCLASSIFIED 47 781 314 T HAZARDOUS 1 319 096 T waste streams7 could be beneficiated. If the amount of industrial waste were to be reduced by 20%, and domestic waste by 60%, it would unlock R9.2 billion resource value to the economy. Source: DEA (2012) by 3 million tonnes to 111 million tonnes since 2011. The waste economy contributed R24.3 billion to Industry associations data the South African GDP, provided 36 000 formal South Africa’s dry recyclable sector is well jobs and supported an estimated 80 000 supported by industry-driven associations. Table 1 informal jobs/livelihoods. shows active industry associations and stream- specific estimates tonnages generated and In 2014, the national Department of Science and diverted as reported by industry annual reports Technology (DST) Waste Research, Development and engagements with industry associations. The and Innovation (RDI) Roadmap estimated that an table also provides estimated tonnages available additional R17 billion per year worth of resources for each material for the Western Cape8. could be unlocked if 100% of the 13 identified 7 Municipal waste (non-recyclable portion); organic component of municipal waste; biomass waste from industry; construction and demolition waste; paper; plastic; glass; metal; tyres; e-waste; slag; ash; and waste oils. 8 The two extrapolations based on: the proportion of the population of the Western Cape compared to the other provinces, and the nominal output of the Western Cape compared to the other provinces. Waste: Market Intelligence Report 2019 8
Table 1: Recyclables processed and available in 2017 as reported by associations Sources: Most recent industry association annual reports, IndWMPs, and direct engagements during 2018 Collected / Diverted Available for Recycling (Tonnes) from Landfill Industry Material in Circulation Name of industry Association (Imported / Western Cape association Manufactured) Tonnages Percentage Total in SA Nominal Pop Output PET (Beverage PETCO 143 438 93 235 65% 50 203 5 783 7 015 Bottles) 210 939 PET (Thermoform/ – 67 500 0 0% 67 500 7 775 9 432 Edible Oil) Plastics LDPE 341 412 105 155 31% 236 257 27 213 33 011 HDPE POLYCO 227 000 883 999 63 333 28% 163 667 18 852 22 869 PP 315 587 47 338 15% 268 249 30 898 37 481 PVC SAVA 157 912 17 844 11% 140 068 16 133 19 571 PS PASA 50 318 5 384 11% 44 934 5 176 6 278 Paper PRASA 1 813 680 1 282 120 71% 531 560 61 227 74 273 Glass TGRC 770 412 631 738 82%9 138 674 15 973 19 376 Cans 162 000 Metal Closures MetPac-SA 18 000 217 000 164 486 76% 52 514 6 049 7 338 Drums / Pailes 37 000 ERA 360 000 45 000 13% 315 000 36 283 44 014 Ewaste SAWEEEDA 322 000 45 000 14% 277 000 31 906 38 704 (2015) Organic Recyclers ORASA – – – – – – 9 2.2.1. Household separation levels with larger urban populations. Figure 3 and The availability and quality of waste, particularly Figure 4 respectively show the degree of post-consumer streams, are dependent on the household material separation per province and level of material separation done by households. metropolitan municipality. The Western Cape This in turn is linked to demographics and (20.3%) and the City of Cape Town (CoCT) (23%) “recycling culture”. Broadly speaking, higher have the highest rates of household separation separation levels are more common in provinces (StatsSA 2018). 9 82% refers to the reuse and recycling (cullet) of glass. 9 Waste: Market Intelligence Report 2019
25% 25% 23% 20% 20% 20% 16% 15% 15% 13% 13% 10% 10% 8% 8% 8% 8% 6% 6% 5% 5% 5% 5% 5% 5% 4% 1% 0% 0% LP EC NC FS KZN MP NW GT WC MAN BCM NMB ETH TSH EMM CoJ CoCT Figure 3: Household separation by Figure 4: Household separation province (2015) by metro (2015) Source: StatsSA (2018) Source: StatsSA (2018) 2.3. Size of the Western Cape waste sector The Western Cape generated ~7.7 million tonnes of characterised by dirty mixed waste streams and waste in 2015 (DED&T, 2016). The province’s waste large volumes of organic residues. comprises mostly of municipal solid waste (MSW), and agricultural waste and residues. This is to be Table 2 and Figure 5 show the tonnages expected, as much of the Western Cape’s economy generated in the Western Cape. Annex A provides is driven by agriculture and tertiary services. As a detailed waste distribution figures by metro and result, much of the waste generated will be district municipality. Table 2: Total waste tonnages generated per district municipality / metro in 2015 Source: DED&T (2016) Municipality Municipal Agri / Construction Commercial / Other Total Solid Waste Forestry / Demolition Industrial Residues City of Cape Town 1 671 146 66 885 1 090 995 637 419 247 248 3 713 693 Cape Winelands 286 482 304 734 272 749 98 976 49 489 1 012 430 Central Karoo 23 874 34 531 17 047 4 308 4 334 84 094 Eden 190 988 501 013 153 421 70 344 34 865 950 631 Overberg 95 495 540 887 85 234 30 540 15 905 768 061 West Coast 119 368 917 734 85 234 39 514 23 544 1 185 394 Western Cape 2 387 353 2 365 784 1 704 680 881 101 375 385 7 714 303 Waste: Market Intelligence Report 2019 10
31+31+22115L 31% MUNICIPAL SOLID WASTE - Non-recyclables (9%) - Metals (7%) - Organics (6%) - Paper (4%) - Plastics (3%) - Glass (2%) WESTERN CAPE 31% AGRICULTURAL 7.7 MILLION - Agricultural residues (28%) - Abattoir waste (2%) TONNES / 2015 - Forestry residues (1%) 22% CONSTRUCTION / DEMOLITION 11% COMMERCIAL / INDUSTRIAL 5% OTHER - Wet sewerage sludge (4%) - E-waste (1%) - Tyres (0.2%) Figure 5: Western Cape waste characterisation in 2015 Source: DEDAT (2016) Commercial and industrial waste streams are The agriculture and forestry sector generates popular with private sector solution providers. large volumes of clean homogenous waste Private sector waste is: streams. However, agricultural waste is often misrepresented as waste, and its re-entry into ■ often continuous, homogenous, and found in other points of the agricultural value chain, albeit large volumes; not in the form it was intended for, is often not ■ less contaminated and easier to separate at considered. Nevertheless, it is a sought-after points of source; stream that, because of logistical constraints, is ■ easier to access from a contractual often processed in close proximity of generation. perspective; and ■ motivating commercial and industrial Table 3 shows the breakdown of total Municipal generators to look for alternative solutions, as Solid Waste (MSW) generated per Western Cape it reduces their disposal overheads. district / metropolitan municipalities for 2015, and the extrapolated tonnages for 2018 and 2021, based on the expected population growth. 11 Waste: Market Intelligence Report 2019
Table 3: MSW generated per district municipality/metro in 2015, 2018 and 2021 Source: DED&T (2016) and Quantec (2018) MSW (Tonnes)10 Population 2015 2021 Area 2018 (estimated) Municipality (actual) (estimated) (km2) 2018 Growth Per Total Total Per km2 Total (estimated) since 2015 person City of Cape Town 2 446 4 254 946 6% 1 671 146 1 767 272 0.415 1 740 1 875 608 Cape Winelands 21 473 930 779 8% 286 482 310 590 0.334 43 334 820 Central Karoo 38 854 76 029 4% 23 874 24 792 0.326 2 26 131 Eden District 23 331 626 547 6% 190 988 202 584 0.323 27 214 559 Overberg 12 239 309 366 9% 95 495 104 242 0.337 25 112 951 West Coast 31 119 452 595 10% 119 368 130 871 0.289 15 142 558 Western Cape 129 462 6 650 261 7% 2 387 353 2 540 351 0.382 51 2 706 628 The CoCT, which is the only metropolitan of all waste was made up of non-recyclables such municipality in the Western Cape, generates as textiles, residual, construction, wood, and what more than 70% of the waste in the Western Cape. is termed “other”. See Annex B for a detailed The most recent waste characterisation study breakdown of CoCT waste as per the waste was undertaken in 2018. Figure 6 shows that 31% characterisation study. 31% NON-RECYCLABLE 28% ORGANIC 14% PLASTICS 13% PAPER 7% HAZARDOUS 4% GLASS 2% METALS 0.5% TETRAPAK 0.3% EWASTE Figure 6: Waste characterisation for the CoCT Source: CoCT (2018a) 10 This year’s MIR has separated C&D waste from the MSW as this stream has been separated at landfills Waste: Market Intelligence Report 2019 12
2.4. General drivers for Africa compared to benchmarks in developed waste beneficiation economies. In spite of this, waste generators still regard landfilling as a costly overhead, especially 2.4.1. Increasing cost of landfilling in the Western Cape. Figure 7 shows landfill gate The cost of landfill disposal (the gate fee charged fees for general waste across all of South Africa’s per tonne) continues to be relatively low in South eight metros. R600 R556 Disposal price per tonne (Rand) R484 R450 R381 R336 R300 R331 R280 R292 R248 R230 R243 R216 R177 R200 R164 R150 R154 R143 R0 City of Cape eThekwini Mangaung City of City of City of Buffalo City Nelson Town Ekurhuleni Johannesburg Tshwane Mandela Bay Incl VAT (15%) Excl VAT Figure 7: Landfill gate fees for general waste for South Africa’s eight metros in 2017/2018 Source: GreenCape The CoCT has the highest landfill gate fees in so too does the demand for alternatives to the country. Figure 8 shows the rise in gate fees landfill solutions. This strengthens the business in the Cape Town metro since 2013/14, and case for investors looking to invest in solutions expected increases up to 2020/21. As the cost of to provide cheaper alternative services to Cape landfill disposal increases above inflation11, and Town-based businesses. with it increasing overheads for waste generators, 11 Inflation was 4.5% on 23 Jan 2019 (www.Tradingeconomics.com) 13 Waste: Market Intelligence Report 2019
R900 R812 R800 R711 R700 R641 Rand / Tonne (excl. VAT) R612 R600 R558 R536 R515 R484 R500 R460 R421 R421 R387 R389 R400 R347 R317 R292 R300 R200 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Financial Year General Special Figure 8: Landfill gate fees (excl. VAT) for the CoCT (2013/14 – 2020/21) Source: GreenCape and CoCT (2018b) The national DEA aims to implement mechanisms suitable landfills for disposal. Old landfills are under its own control to fast track landfill closing, and the cost and sighting of new landfills diversion. This includes plans for the have been challenging. However, the Western Cape implementation of a landfill tax, which will is not a homogeneous entity. Some municipalities increase overall disposal cost across the are in more serious situations than others. country. This is still to be assessed, along Municipalities greatly affected by this will be in with an adequate tax. need of cost-effective alternative waste treatment technologies to assist with waste diversion. 2.4.2. Loss of landfill airspace Figure 9 shows the estimated lifespan of the The Western Cape, like many parts of South Africa, Western Cape’s municipal landfills as of 201812, is currently grappling with the availability of and the location of intended regional landfills. 12 Landfill airspace is based on DEA&DP estimations. Waste: Market Intelligence Report 2019 14
Regional Landfills Early planning phase Advanced planning phase Matzikama Operational * Numbers indicate remaining lifespan (yrs) Cederberg Beaufort West Bergrivier Saldanha Witzenberg Bay Laingsburg Prince Albert Swartland Oudtshoorn Drakenstein Kannaland Breede George Langeberg City of Valley Knysna Bitou Cape Town Mossel Theewaterskloof Swellendam Hessequa Bay Overstrand Cape Agulhas less than 5 years more than 5 but less than 15 years more than 15 years Figure 9: Estimated landfill lifespan for each local municipality in the Western Cape Source: Extrapolated from DEADP (2019) The Western Cape does have privately owned 2.5. General risks and barriers and operated landfills. However, only Vissershok private landfill13 (next to Vissershok Municipal Extracting value from MSW Landfill) operates as a commercial landfill It is difficult to extract value from municipal solid receiving waste from businesses and waste (MSW) due to its complex nature and municipalities. Furthermore, there are three depending who the owner of the waste is. Firstly, existing and six proposed regional landfills MSW is constitutionally managed, and thus to serve not only one local municipality, but “owned”, by local municipalities. This makes multiple municipalities. access to the waste onerous due to municipal procurement processes. Secondly, MSW is 2.4.3. Perceived job creation in waste essentially a mix of general household articles, In 2017, the national DEA undertook its Operation which include general and hazardous waste, all of Phakisa: Chemicals and Waste Economy. During which come in various quantities and ratios and this session, the DEA identified 20 initiatives across all of which can be extremely contaminated. four work streams to divert 20 million tonnes of Nevertheless, there is potential to generate value, waste from landfill. If realised, these initiatives either once separation at source is implemented, could unlock an additional R11.5 billion per year to or if a robust technology is implemented. help create 45 000 direct and 82 000 indirect jobs and 4 300 small, medium and micro-sized enterprises (SMMEs). This has resulted in DEA’s active role in regulation reform (see Section 3) and industry SMME support. 13 Vissershok Private landfill is hazardous landfill jointly owned by two waste companies, Averda and Enviroserv. 15 Waste: Market Intelligence Report 2019
Low levels of separation at source City of Cape Town’s landfill Generally speaking, South Africans do not have a gas investment culture of separating waste at source. This makes The CoCT launched its landfill gas extraction extracting value difficult and costly. Regarding systems in March 2018 at Coastal Park and households, there are no incentives/disincentives Bellville South landfill sites. These systems were for households to separate at source. ‘Post developed as a carbon-offsetting Clean consumers’, namely households, pay for waste Development Mechanism that will generate management through municipal rates. These carbon credits for the CoCT. Currently, the gas is rates are required to be paid irrespective of flared, but the intention is to generate electricity. households diverting waste or not. Secondly, It is likely that the projects will produce an apart from the City of Johannesburg (see Section estimated 1 MW of electricity. A similar system is 2 6 below), there are generally no mandatory expected to be installed at the CoCT’s Vissershok requirements to separate at source. Even if municipal landfill in 2019. municipal waste management by-laws require mandatory separation at source, municipalities Closure of Bellville South landfill do not always have the capacity to enforce this. Due to licence requirements, September 2018 saw However, it makes financial sense for the private the CoCT closing its Bellville South landfill. This sector to separate and divert waste to reduce leaves only two operational municipal landfills in landfill disposal overheads. the CoCT, these being Vissershok (municipal) and Coastal Park landfills. However, Bellville South’s Promulgation of the National Minimum material recovery facility and refuse transfer Wage Act station will continue to operate as usual. South Africa’s National Minimum Wage Act No. 9 of 2018, published in the Government Gazette of Drakenstein terminates 27 November 2018, came into effect on 01 January beneficiation project 2019. The Act provides for a blanket minimum Drakenstein local municipality has terminated its payment structure for every South African in proposed integrated waste management facility employment, including those in the waste sector. in the town of Wellington. This came after the The proposed minimum wage is to be R20 per national Minister of Finance requested the hour or R3 500 per month for a 40-hour week, project to restart the EIA process due to non- subject to an annual review. The waste sector in compliance. This was a public-private South Africa is labour intensive and such partnership with the prominent waste minimum requirements are expected to impact management company, Interwaste, which would many businesses, especially SMMEs. have seen R1 billion invested in material recovery, biogas, and incineration. The facility was 2.6. Highlights from 2017/2018 designed to process 700 tonnes a day of MSW. Drakenstein has indicated that they will be City of Johannesburg separation- investigating a new waste beneficiation project. at-source As of July 2018, the City of Johannesburg International bid for Interwaste implemented mandatory household separation French-based Séché Environnement announced of dry recyclables. The phased approach makes its intention to acquire ownership of Interwaste, a it compulsory for residents in specific areas to large South African waste management separate dry recyclables for kerbside collection. company. This bid has been approved by the Collections will be undertaken by Pikitup and its Interwaste board. This is the second large waste outsourced service providers. company to be acquired by an international waste company. The other was WasteMan by Averda in 2015. Waste: Market Intelligence Report 2019 16
© Bruce Sutherland 17 Waste: Market Intelligence Report 2019
3 Legislation and regulations This section provides a brief overview of major legislation and regulations that govern waste management in South Africa. It also highlights draft and anticipated legislation and regulations that are likely to be implemented. South Africa has a vibrant and progressive process to be undertaken before an activity can regulatory framework for landfill diversion of be authorised. Commencement with any waste and subsequently waste beneficiation. of the ‘Listed Activities’ prior to obtaining Over the course of three decades, the regulatory authorisation from competent authorities is environment has shifted from landfill prohibited in terms of NEMA and is regarded as management to recycling, and recently towards an offence. The EIA process requires a third party extended producer responsibility. environmental assessment practitioner (EAP) to undertake the application. 3.1. The legislative framework for waste management The EIA regulations do not apply to general In terms of Chapter 2 (Bill of Rights) of the South activities only, but include waste activities African Constitution, everyone has the right ‘to governed by South Africa’s National an environment that is not harmful to their health Environmental Management Waste Act (NEMWA) or wellbeing; and to have the environment (Act 59 of 2008), or more colloquially known as protected, for the benefit of present and future ‘the Waste Act’. generations’. These fundamental rights underpin the framework that governs environmental National Environmental Management legislation in South Africa, this being the National Waste Act (Act 59 of 2008) Environmental Management Act (NEMA). NEMWA is a waste-specific act that is guided by integrated waste management principles aimed at The National Environmental preventing negative waste-related environmental Management Act (107 of 1998) impacts. Investors and businesses looking to The NEMA is guided by a number of key mitigate any risks should take into consideration integrated environmental management the NEMWA, its requirements, and the principles. These aim to ensure that negative ramifications if it is violated. environmental impacts are prevented, mitigated, and/or regulated. They also provide an array of Since its promulgation, all spheres of government instruments to monitor and manage activities are bound to the ideals of the waste that impact the environment. management hierarchy: One of these mechanism is the environmental ■ avoid and minimise the generation of waste; impact assessment (EIA) regulations. The EIA ■ reduce, reuse, recycle and recover waste; and regulations list a number of activities that may ■ treat and safely dispose of waste as a last result in substantial negative impacts on the resort. environment. The ‘Listed Activities’ require either a ‘Basic Assessment’ process or an ‘EIA Scoping’ Waste: Market Intelligence Report 2019 18
The NEMWA provides a list14 of waste requires that any (juristic) person intending to management activities15 that must undergo a perform recycling, reuse or recovery activities, waste management licensing process if certain or the sorting of waste, must be accredited with criteria are triggered. These activities are CoCT before commencing such activities. To deemed to have, or are likely to have, a be accredited, the person must also submit an detrimental effect on the environment. integrated waste management plan to a CoCT waste management officer. Waste management activities are differentiated into three categories that have different approval Existing waste businesses not yet registered with and licensing requirements: their respective municipalities, or investors looking to enter the market, must ensure that they engage ■ ‘Category A’ activities require a basic EIA; with the respective solid waste departments of the ■ ‘Category B’ activities require a scoping and municipalities where they conduct or plan to full EIA process to be undertaken prior to conduct their activities to determine whether they obtaining a waste management licence; and need to be registered and/or accredited. ■ ‘Category C’ activities require adherence to specific norms and standards. 3.2. New regulatory updates A number of legislative changes have occurred Category C is an attempt to facilitate the uptake since the publication of the previous MIR. The of alternative waste treatment. The DEA has following changes are likely to have an impact on downgraded certain triggers from Category A to the waste sector: Category C activities. Thus, instead of undertaking an EIA process, the activities in question only need Industry Waste Management Plans to adhere to norms and standards. The DEA has published a NEMWA Section 28 notice (Government Notice 1353) on 06 December National Environmental Management 2017. The notice requires the paper and Air Quality Act (Act 39 of 2004) packaging, lighting equipment, and electrical The National Environmental Management Air and electronic industries to develop and submit Quality Act (NEMAQA) is an air quality specific an industry waste management plan on how the act that aims to prevent negative air quality respective industries will manage its waste. related environmental impacts. The NEMAQA Producers17 were required to prepare and submit provides a list of activities, published under an IndWMP to the Minister for approval by 06 Government Notice 893 in Government Gazette September 2018 or subscribe to a non-profit 37054 dated 22 November 2013, that trigger the producer responsibility organisation (PRO) that need to undertake an air emission licensing will develop and implement an IndWMP. Once the process. The NEMAQA is particularly relevant IndWMP has been approved by the Minister, to waste-to-energy projects. Investors and producers must comply with the requirements of businesses interested in waste-to-energy the IndWMP to which they have subscribed. At activities must consider the NEMAQA, its the time of publishing this MIR, the plans were requirements, and the ramifications if violated. to be approved by mid-March 2019 to be implemented in October 2019. However, it is Municipal waste management by-laws unlikely that this will be the case, and that it Local municipalities may choose to regulate how is more likely that the IndWMPs will only be waste is managed within their boundaries implemented in 2020. through the promulgation of waste specific by-laws. These by-laws often provide obligations Scheduled landfill restrictions (2018/19) for both waste generators and waste handlers. The national norms and standard for the disposal The CoCT’s by-law, as amended16, for example of waste to landfill (R. 636 of 23 August 2013) 14 Government Notice 921 National Environmental Management: Waste Act (59/2008): List of waste management activities that have, or are likely to have, a detrimental effect on the environment (as amended) 15 Storage, recycling or recovery, treatment, disposal 16 Copy of the CoCT’s bylaw can be found at https://openbylaws.org.za/za-cpt/act/by-law/2009/integrated-waste-management/ resources/eng.pdf 17 A producer includes any person, or category of person, or a brand owner who is engaged in the commercial conversion or refurbishment of new and/or used: paper and packaging material, lighting equipment, electrical and electronic equipment, or goods wrapped in primary or secondary packing material. 19 Waste: Market Intelligence Report 2019
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